Recent meetings were held in Montreal, Canada for the sixth round of talks to renegotiate the North American Free Trade Agreement, and Montana wheat and barley farmers are paying very close attention to these ongoing talks.
“Well, NAFTA has been one of the most important agreements overall for the U.S. especially the wheat industry. U.S. wheat exports into Mexico have increased 400% since we signed the NAFTA agreement. And we’ve also increased the amount of barley that they take in particularly out of Montana. Mexico is Montana’s number one market for barley,” said Michelle Erickson-Jones, president of the Montana Grain Growers Association from Broadview.
She said the trade agreement which was signed into law in 1993 was significant then and still is.
“It reduced a lot of technical barriers to trade that existed previously and just opened up that market and allow a lot of grain to flow south," said Erickson-Jones. "A lot of the infrastructure is built for U.S. wheat to readily flow into Mexico.”
Former Montana Senator and U.S. Ambassador to China Max Baucus is Co-Chair of Farmers for Free Trade and said it’s not just farmers who will pay the price for NAFTA withdrawal.
“If it were repealed, I just think it would cause a huge disruption to our national economy and certainly for those of us who export a lot of products. It’s everybody involved in agriculture. It’s implement dealers. It’s the elevators and the economy of the county,” said Baucus.
As for trade with Canada, U.S. wheat growers are at a disadvantage.
“We actually have issues with our ability to ship wheat into Canada," Erickson-Jones said. "They have what we refer to as a technical barrier to trade. Any of our wheat headed into the Canadian market is graded at feed and priced at feed regardless of its quality and that’s a problem we hope to resolve during the NAFTA negotiation.”
Like other trade agreements, there will be winners and losers in these NAFTA negotiations.
“Agriculture is almost always the first to be retaliated against when you get in trade wars. That’s when people add tariffs because it’s easy to add tariffs. And that has a huge effect on our nation’s economy and Montana’s economy,” said Erickson-Jones.
Considering that 70% of Montana’s wheat is in fact exported elsewhere around the world, it’s easy to see why it’s so important that Agriculture has a seat at the table as the renegotiation continues regarding NAFTA.
And this week organizations along the North American wheat value chain sent a letter to leaders in Canada, Mexico and the United States stressing the importance of NAFTA to the entire North American wheat industry.